India regulator bars two over Dhenu Buildcon fabricated loan scheme, inflated market value
India’s markets regulator on Wednesday barred two individuals linked to Dhenu Buildcon Infra from the securities market for allegedly orchestrating a fabricated-loans scheme that inflated the company’s market value more than 1,600-fold. The Securities and Exchange Board of India said in its interim order that 250 million rupees ($2.61 million) was repeatedly circulated through bank accounts of…
India's securities regulator has banned two individuals associated with Dhenu Buildcon Infra from participating in the stock market. The Securities and Exchange Board of India (SEBI) accused Surendra Kumar Jain and Virendra Jain of running a fabricated-loans scheme that artificially boosted the company's market value by over 1,600 times.
The regulator revealed that a total of 250 million rupees ($2.61 million) was circulated repeatedly through the bank accounts of entities connected to the two men. Dhenu Buildcon purportedly obtained the fictitious money from seven companies, including Golkonda Aluminium Extrusions and Tiaan Consumer. SEBI determined that these entities were controlled or managed by the two men, with common addresses, directors, authorized signatories, and cross-shareholdings linking them.
The regulator also prohibited Dhenu Buildcon from engaging in any corporate actions, such as bonus, rights issues, or dividend payments. As a result, the company's market capitalization skyrocketed from 30 million rupees to 49.25 billion rupees, despite little change in the company's revenue or profitability, according to SEBI.
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